Use the Information to Answer the Following Question(s)

question 32

Multiple Choice

Use the information to answer the following question(s) .
Cypress Systems Inc., of Florida, agrees to sell specialized hydroponic growing equipment to Landcaster's of Australia. Because the two companies have never done business with each other, Cypress requires a banker's acceptance as payment for the $1,000,000 order. The banker's acceptance carries a 1.4% commission per annum and payment is to be received in 6 months. If Cypress Inc. chooses to discount or sell the banker's acceptance to its bank, the discount rate is 1.00% per annum.
-Refer to Instruction 16.1. What is the size of the discount (not including the commission fee) Cypress must take for receiving the proceeds of the sale today rather than waiting for six months?

• A) $7,000
• B) $5,000
• C) $12,000
• D) $14.000

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Definitions:

Acheulean Technology

An archaeological term referring to a stone tool industry characterized by distinctive oval and pear-shaped hand-axes associated with early humans, particularly Homo erectus, dating from the Lower Paleolithic era.

Evolution

The process by which different kinds of living organisms are thought to have developed and diversified from earlier forms during the history of the earth, driven by natural selection, genetic drift, mutations, and gene flow.

Brain Evolution

The process through which changes occur over time in the brain structure of different species, contributing to the diversity of cognitive abilities and behaviors.

Evidence

Information or facts that are used to support or refute a claim or belief.